Three very important pieces of legislation — important because they're affecting rural Illinois — were signed by Governor Thompson this year: the Illinois Rural Bond Bank, the Institute for Rural Affairs, and the Medical Education Loan Bill.

The first will create the Illinois Bond Bank, which allows local units of government to borrow money for improvement and development projects at a reasonable cost. The Bond Bank serves any town with a population of less than 25,000; all counties except those over 1 million or contiguous to those counties over 1 million; school districts; community colleges; and other local units of government.

Why will the Bond Bank be so attractive? Because it will pool bonds, and thus be able to sell them on the national market at a more favorable interest rate. Small towns and rural governments can then borrow the money they need quickly, easily, and at lower interest rates than are currently available to them. If they went in the market on their own (which up until now there was no other alternative), it would be a lot more expensive because the bond market tends to cater to larger bond issuers and doesn't pay much attention to small towns.

Not only does the Bond Bank pool small bonds to get more reasonable credit rates for rural areas, but it also has:

— An intercept provision upgrading the quality [risk] of the issue. In case of default, the various State aid due the borrowing community is intercepted to pay the bond debt service;

— Debt service reserve provided by appropriation of the General Assembly;

— "State Moral Obligation" in case the reserve fund is depleted; the Governor and General Assembly will work together to allocate monies to replenish that fund; and

— Professional financial advice for small and/or rural governments.

Providing the General Assembly appropriates the $125,000 needed to start the program, the first bonds should be issued in March of 1990.

The second piece of legislation officially funds the Institute for Rural Affairs at Western Illinois University (WIU) in Macomb. Until the signing, the Institute was funded through reallocated funds from the Western Illinois University budget.

The Institute is not, however, just a WIU project. It is a statewide clearinghouse for rural information designed to work with all of the colleges and universities

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across the State to collect information about the unique problems facing Rural Illinois.

Some of the projects the Institute is working on are:

— Strengthening rural economic development;

— Improving health care and education in Rural Illinois;

— Building a rural data base; and

— Completing other projects identified by the 1987 Task Force on the Future of Rural Illinois.

I had also cited a third bill. That new law amends the Family Practice Residency Act, establishing the Medical Education Loan Repayment Program. Clearly, our rural areas need more physicians. But the cost of education — anywhere from $65,000 to $135,000 — makes it difficult for doctors just out of school to practice in rural areas — even if that has been their life-long ambition. Once funded, the program should fill six new slots each year.

This bill establishes a grant incentive program to recruit and retain physicians in areas of Illinois that demonstrate a real need for greater medical care. Under this program, up to $20,000 or 25 percent of a physician's loans may be given a doctor who chooses to practice in an area serving rural or disadvantaged urban citizens. There are 32 whole counties and parts of 52 other counties that are eligible for the program as determined by the Illinois Department of Public Health.

Aside from the obvious assistance these measures provide for Rural Illinois, all of these bills have one important thing in common; they are all responses to problems identified by local officials. During the Rural Task Force hearings two years ago, local officials told us that they need to be able to finance local projects without paying "an arm and a leg." There are a lot of special concerns facing rural areas. But unless you listen to the people who know — the citizens, the farmers, the local officials — and unless you have all the facts in front of you — the kind of facts compiled by a good academic research institution — you can't make responsible government policy.

Page 24 / Illinois Municipal Review / November 1989